Fines Paid by Owners of Closely Held Organizations

The court may offset the fine imposed upon a closely held organization when one or more individuals, each of whom owns at least a 5 percent interest in the organization, has been fined in a federal criminal proceeding for the same of- fense conduct for which the organization is being sentenced. The amount of such offset shall not exceed the amount resulting from multiplying the total fines imposed on those individuals by those individuals’ total percentage interest in the organization. Application Notes: Commentary 1. 2. For purposes of this section, an organization is closely held, regardless of its size, when relatively few individuals own it. In order for an organization to be closely held, ownership and manage- ment need not completely overlap. This section does not apply to a fine imposed upon an individual that arises out of offense conduct different from that for which the organization is being sentenced. Background: For practical purposes, most closely held organizations are the alter egos of their owner- managers. In the case of criminal conduct by a closely held corporation, the organization and the cul- pable individual(s) both may be convicted. As a general rule in such cases, appropriate punishment may be achieved by offsetting the fine imposed upon the organization by an amount that reflects the percentage ownership interest of the sentenced individuals and the magnitude of the fines imposed upon those individuals. For example, an organization is owned by five individuals, each of whom has a twenty percent interest; three of the individuals are convicted; and the combined fines imposed on those three equals $100,000. In this example, the fine imposed upon the organization may be offset by up to 60 percent of their combined fine amounts, i.e., by $60,000. Historical Note Effective November 1, 1991 (amendment 422). * * * * * 4. DEPARTURES FROM THE GUIDELINE FINE RANGE Introductory Commentary The statutory provisions governing departures are set forth in 18 U.S.C. § 3553(b). Departure may be warranted if the court finds “that there exists an aggravating or mitigating circumstance of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission in formu- lating the guidelines that should result in a sentence different from that described.” This subpart sets forth certain factors that, in connection with certain offenses, may not have been adequately taken Guidelines Manual (November 1, 2024) ║ 553 §8C4.1 into consideration by the guidelines. In deciding whether departure is warranted, the court should consider the extent to which that factor is adequately taken into consideration by the guidelines and the relative importance or substantiality of that factor in the particular case. To the extent that any policy statement from Chapter Five, Part K (Departures) is relevant to the organization, a departure from the applicable guideline fine range may be warranted. Some factors listed in Chapter Five, Part K that are particularly applicable to organizations are listed in this sub- part. Other factors listed in Chapter Five, Part K may be applicable in particular cases. While this subpart lists factors that the Commission believes may constitute grounds for departure, the list is not exhaustive. Historical Note Effective November 1, 1991 (amendment 422).